German Stocks Advance; U.S. Economic Data Beats Forecasts

Aug. 17 (Bloomberg) -- German stocks advanced to a four-month high as measures of consumer confidence and leading
economic indicators in the U.S. exceeded forecasts.

Commerzbank AG and Deutsche Bank AG, Germany’s two biggest
lenders, climbed more than 3 percent. Daimler AG rose 2.6
percent as a gauge of carmakers posted the best performance of
the 19 industry groups on the Stoxx Europe 600 Index.

The DAX Index gained 0.6 percent to 7,040.88 at the close
in Frankfurt, rising to its highest level since April 2. The
benchmark measure has rallied 18 percent from this year’s low on
June 5 as central banks around the world took steps to bolster
economic growth. The broader HDAX Index added 0.7 percent today.

“Signs of recovery in the U.S. are reassuring for
investors in global companies, car manufacturers, as America is
much more important for them than, for instance, southern
Europe,” said Juergen Meyer, head of European equities at SEB
Asset Management in Frankfurt, which has 2 billion euros ($2.5
billion) under management. “Real world-leading companies
needn’t worry about local recessions.”

The Thomson Reuters/University of Michigan preliminary
August index of consumer sentiment increased to 73.6, the
highest level since May, from 72.3 in July. The median forecast
of 72 economists surveyed by Bloomberg had called for a reading
of 72.2. A separate release showed that a measure of leading
economic indicators gained 0.4 percent in July. Economists had
projected the gauge would rise 0.2 percent, according to the
median estimate in a Bloomberg survey.

“There is a realization that the economic data is not as
bad as people expected,” said Raimund Saxinger, a fund manager
at Frankfurt-Trust Investment GmbH, which oversees about $22
billion. “The numbers from the U.S. today confirm this.‘‘

German Consent

German Chancellor Angela Merkel, speaking in Canada
yesterday, backed the European Central Bank’s requirement that
indebted countries meet conditions in return for help reducing
their borrowing costs. She also said that Germany is ‘‘in line’’
with the ECB’s approach to defend the euro.

Commerzbank and Deutsche Bank climbed 3.3 percent to 1.26
euros and 3.5 percent to 26.72 euros respectively. A gauge of
European lenders contributed the most to the Stoxx 600’s advance
amid continued speculation that the European Union will soon
disburse the first tranche of its 100 billion-euro bailout to
Spain’s most debt-stricken banks.